Bank of Silicon Valley customers received a startling email in their inbox on Monday night from the bank’s new CEO, Tim Mayopoulos, stating that the institution was not only open, it was also operating as usual.
“Silicon Valley Bank, NA is open and conducting business as usual,” reads the email, obtained by TechCrunch from multiple sources. At the time of publication, the SVB website has been restored. Still, some founders tell TechCrunch they’re having trouble accessing their accounts and are waiting for the threads to be officially deleted.
Mayopoulos, who joined the company as CEO on Monday, said new deposits — as well as existing ones — are FDIC-protected at the new bank, called Silicon Valley Bank, NA.
The explanation behind SVB’s surprising return is that the FDIC transferred the old SVB’s deposits and assets “to a newly created, full-service bridge bank operated by the FDIC,” the email describes. “All wire transfers entered on March 9 or 10 that have not yet been processed have since been cancelled. If you wish to carry out these transactions, you must restart them.
Mayopoulous, meanwhile, draws on his experience during the 2008 recession to guide the new bank through the crisis.
The leader was part of the management of the mortgage finance company Fannie Mae in 2008, then served as general manager of the same company. Most recently, he was president of Blend, which brings software to the consumer banking industry. Mayopoulous shared his previous experience with clients in the email, adding that he is “very proud of the work we have done there to restore profitability to the business and stabilize the housing finance system in a time of unprecedented challenge”.
SVB’s new CEO says he wants to restore confidence, and it’s only been a few days since the bank deposits have been picked up by regulators and its former chief executive, Greg Becker, resigned amid a historic bank run. SVB was considered the second biggest US bank failure of all time. Its UK branch was acquired by HSBC UK for a symbolic £1saving it from insolvency.
The intervention from regulators has brought relief to the tech sector, including startup founders who have struggled to make payroll and maintain operations despite uncertainty about their access to funding.
“We seek to restore your confidence and support you and your businesses at this time,” the email ends. The latest statement from the FDIC confirmed SVB’s new lead, adding that senior management has been removed from the bank.
By resuming operations in the United States, SVB may now have a better chance of convincing an institution – whether another bank or a private equity firm – to buy its assets – especially after the failure of the last attempt. There remain, of course, unanswered questions, including what will happen to SVB’s assets and whether customers will return to the bank.
The big questions ahead are what happens to the rest of SVB’s assets, and will the founders return to the institution at the same clip they left it in?
TechCrunch has contacted SVB for more information and will update the story accordingly. TechCrunch was unable to reach the FDIC for comment and will update the story if that changes.
How do you react to the SVB crash? What do you say to your colleagues, portfolio companies, founders and investors? For advice and thoughts, you can contact Natasha Mascarenhas on Twitter @nmasc_ or on Signal at +1 925 271 0912. Her email is email@example.com. Requests for anonymity will be respected.